Larry Kudlow: People everywhere must fight for freedom

Larry Kudlow: People everywhere must fight for freedom

Earlier today I hosted a Fox Nation special on the totalitarian dangers of socialism and why this system always fails and instead argued for free market capitalism and a free economy as the surest path to prosperity. Free market capitalism is a triumph of human power. Socialism is a catastrophe of state or governmental power.

The problem with socialism and central state planning is that they never deliver the goods, literally. Show me a socialist economy like the former Soviet Union or today’s China, Venezuela, Cuba, Iran, North Korea and others and I’ll show you an impoverished and sinking economy . Even China, which thrived on market reforms between 1980 and 2000, has in recent decades fallen back into ever-increasing state control and, of course, in recent years its economy has faltered badly.

Milton Friedman in his famous book “Capitalism and Freedom” argued that “a society that puts equality before freedom will get neither”. Thomas Sowell tells us, “Socialism is a wonderful idea. Only as a reality has it been disastrous.” Hayek argues that if socialists understood economics, they wouldn’t be socialists.

Margaret Thatcher said years ago that the problem with socialism is that you end up running out of other people’s money and my former boss Ronald Reagan said the most terrifying words in English are ‘I’m government and I am here to help.”

We have all learned throughout history how the totalitarian evils of socialism destroy freedom and prosperity. The idea that governments can fix prices and wages is what Hayek called “the knowledge pretext.”

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We learned that only free markets and free exchange between buyers and sellers have the ability to discover prices. It is the free market that is by far the most efficient mechanism for allocating resources to workers, producers, investors and entrepreneurs operating in a free economy.

This is why free market capitalism has generated the most prosperous economic conditions for all classes of individuals. Free markets are color blind, gender blind, religion and ethnicity blind. Healthy market economies keep tax rates low, minimize regulatory burdens, and limit government power by limiting federal spending.

The free market model provides incentives and motivations for work, production and investment. The very dignity of labor is the heart and soul of a prosperous and free economy. The state cannot tell us where to work, how to work, how much you get paid or whatever state, central planning, dictates.

The free economy, bound by the rule of law in a free society, is probably the greatest theory to emerge in all of history. His success in lifting people out of poverty and moving them up the ladder changed the world.

Lately, however, America has drifted towards socialism, to use economist Kevin Hassett’s phrase. Today, socialism no longer attempts Joseph Stalin’s old approach of taking over the means of production such as government ownership of steel mills, factories, farms, or even financial corporations.

Instead, to borrow from Steve Forbes’ construction, modern socialists today seek to control the economy through the centrally planned regulatory state. A perfect example is President Joe Biden’s war on fossil fuels. Radical climate change planners are using extreme, untested environmental standards to stop drilling, fracking, piping, and building new LNG terminals or gasoline refineries.

It is modern socialism. This is dictatorial central planning or, look at the government’s response to COVID, literally shutting down schools, businesses and entire cities and states without any scientific evidence.

Another problem: modern Marxism pushes us back to the totalitarian habits of the old Soviet system – through the media, academia, keeping Hunter Biden’s laptop out of the news, canceling speeches, ruthlessly attacking the President Trump or the Far-Left Rewrite of Americans. history – even breaking up families – but there is a way out, an optimistic vision.

People everywhere must fight for freedom, free markets, capitalism and the prosperity that these values ​​bring. We must maintain our Judeo-Christian culture. The future of this great nation hangs in the balance and in case you missed our summit earlier, it’s airing right now on Fox Nation and it will air Friday at 8 p.m. on Fox Business.

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Federal Reserve Chairman Jerome Powell addresses the Senate Banking, Housing, and Urban Affairs Committee as he presents the Monetary Policy Report to the committee on Capitol Hill, Wednesday, June 22, 2022, in Washington. (AP Photo/Manuel Balce Ceneta/AP Newsroom)

Speaking of the evils of central planning, let’s turn to the Federal Reserve and Jay Powell’s announcements today. They have raised the target by 75 basis points and they say they will raise another 125 basis points at the last two meetings in November and December. Somehow they think they will leave the terminal rate end point at 4.6% next year. Good luck.

Then they say they expect three rate cuts in 2024. Good luck on that. Of course, that doesn’t look like Jay Powell’s new hair on his chest, in Paul Volcker’s mind and they think the unemployment rate will peak next year at 4.4%. Good luck on that and somehow, miraculously, like mana from heaven, the inflation rate will hit 2% in 2025. Good luck on that.

This article is adapted from Larry Kudlow’s opening commentary on the September 21, 2022 edition of “Kudlow”.

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